Professional Indemnity FAQ

Joint Ventures and your Professional Indemnity

What is a joint venture? How does it affect my PI cover?

New firm formed to achieve specific objectives of a partnership like temporary arrangement between two or more firms. JVs are advantageous as a risk reducing mechanism in new-market penetration, and in pooling of resource for large projects. They, however, present unique problems in equity ownership, operational control, distribution of profits (or losses) and I'm afraid, when there is a professional indemnity claim. Research indicates that two out of five JV arrangements last less than four years, and are dissolved in acrimony.

From a Broker or Risk Management point of view, it is important to identify whether your clients are involved in joint ventures and if so declare them to their insurers. Some Insurers will cover automatically but most will not. Then if you do ask to include joint ventures you need to make sure it is clear that it is the Insured's own risk in the joint venture, or do you want to cover all the joint venture partners.

Depending on the nature of the JV, it is possible that insurers will cover all parties under one party's own Professional Indemnity, but in many cases insurers may refuse. It them means separate cover just for the joint venture, but the problem is that when the joint venture ends, they need to take out "run off" cover. Some insurers will do it as a single project cover, particularly where a Design and Construct type risk. If this is not possible, then multi-year "run off" cover can sometimes be bought but how long do you need it for?

My advice is all parties in a joint venture should cover their own risk and this should be a clearly stated intention in any JV agreement. Let the insurers sought out between them who is proportionally more to blame in the event of a claim, but most will be 50/50.

Latest News

CPR joins Ausure

We would like to announce to all our Clients, Prospective Clients, Suppliers and Insurers, that Cooper Professional Risks Pty Ltd trading as CPR Insurance Services, will be leaving National Adviser Services Pty Ltd (NAS) and joining Ausure Pty Ltd as a Corporate Authorised Representative from 5 March 2018.

Fundamentally, there is no difference to you, except our Invoices will look a little different, and the Banking details will be in a different name and account number. Everything else at CPR stays the same.

There are a number of reasons we have made this decision, but the primary reason is for what we believe is best for our clients.

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Special offer to CPR Insurance clients

Employsure are providing a FREE Business Health Check to all our clients and gives you the opportunity to receive an analysis of the health and safety requirements in your workplace. Also. Employsure  will review your employment agreements as well as your wage rates helping you to avoid workplace claims.

Ordinarily this would cost you at least $1,250 but because you are a CPR Insurance client, it is free!

It involves the following review for you.

SAFECHECK

A specialist Work Health and Safety Consultant will visit your workplace and carry out:

A review of your business’ current work health and safety policies, procedures and systems to identify areas of concern or non-compliance

Following the review, you will receive a report summarising the findings and the health and safety

Status of your workplace

WAGE CHECK

A Wages Adviser will review your rates of pay and produce a Wage Check report.

The review will be conducted against the industrial instrument applicable

A report will be supplied advising if the wages are compliant and what steps to take to achieve compliance

CONTRACT REVIEW

A Document Consultant will review an employment agreement and provide recommendations.

The review will highlight compliance issues with the Fair Work Act 2009 as well as best practice

The report will make recommendations to achieve compliance and provide protection to your business.

This will remove any areas of potential dispute and risk

So what do you have to lose? Contact us on 07 3123 1137 and arrange 

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